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Exporter Decalogue

Anyone interested in doing international trade must have in mind a number of preliminary issues. The following ten suggestions are a basic tool that every exporter/importer has to take into account when deciding to internationalise his/her company.

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1. Market analysis 

The first thing a person interested in internationalising his/her company must think is “which market am I interested in?” The object is to analyse whether a given market offers or is interested in the product that your company demands or offers.

You must consider whether the market is large or small, its competitiveness, etc. You must be well aware of the market and remind that many people tend to export/import to or from the largest markets thinking they will get better prices and higher sales.

An example is the case of China. Many people think that China is the place everyone has to export to because it has 1,400 million people. But have you stopped to think that most of its population still lives in rural areas and have little resources to buy imported products? What if your product is unknown to them or is contrary to their customs or tastes?

Study the appropriate market for your product, however great the prospect of a large market is, it may not be suitable to your needs.

 

2. What products can Import / Export?

The second aspect to consider when exporting or importing is whether the product we offer or demand is legitimate or has any restriction on the import/export.

To find out if a product can be exported or imported you only have to access the TARIC (link), and check your products and the restrictions they may have. Example of restricted products are:

  • Harmful Products for ozone
  • Products from certain countries
  • Quantitative limits on certain products
  • National heritage goods of a country
  • Dual-use material
  • etc

 

3. Capacity Analysis Company itself

The next aspect to look at is your own abilities. Do you have the resources and the necessary production capacity to meet foreign demand? Can  you meet continued demand and deadlines? If so, go ahead; you are ready to start exporting.

 

4. Incoterms and Form of Payments 

Incoterms are terms that reflect the standards of voluntary acceptance by both parties -buyer and seller-, about the conditions of delivery of the goods and/or products. They are used to clarify the costs of international trade transactions, defining responsibilities between buyer and seller and reflect current practice in international freight.

You must decide the terms and responsibility you want to assume in the transport of your product. You can find out useful information in our website, or access through our link. Incoterms.

As for the means of international payment, the most common are:

  • Check
  • Transfer
  • Remittance
  • The Documentary Credit (in various forms)
  • Standby Letter of Credit
  • Letter of  guarantee by a bank

Depending on your interest to ensure the form of payment and guarantee the exported/imported product collection, you can choose one of them. If you are unsure of how each method of payment works, the ICEX (Institute of Foreign Trade, entity belonging to the Government) has a detailed guide and they can give advice.

http://www.icex.es/icex/es/navegacion-principal/nuevos-exportadores/index.html

Below we provide a summary of the means of payment.

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5. Financial Support

If you need financing in your process of internationalisation, in addition to traditional financing through banks, some public entities offer support to exporting companies in their mission of internationalisation.

Examples of such entities are ICEX or the ICO. You can access information related to this subject on the following links:

Icex - Link

ICO - Link

 

6. Documents and requirements for import / export

Typically, the basic documents for export or import that you need to present at the customs clearance  are the following:

  • Commercial Invoice
  • Packing List
  • Bill of Lading or Air waybill
  • Certificate of Origin and EUR-1. It is important to pay attention to these documents as the presentation of them can lead to a reduction in the payment of customs duties.

Here you have the list of countries that in 2015 have been granted with one of the different GSP preferential treatments:

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Other common documents that may be required are:

  • Insurance
  • Legalisation of Documents
  • Documents relating to tax or customs formalities


At the time of import/export, depending on the product, certain documents or additional requirements might be requested, as they may be supporting defence products, dual-use technologies and goods, chemicals, etc.

If you have no idea of ​​the documents required for your product, a good source of information is the freight forwarders or agents. Another useful tool for exporters and importers is the TARIC and the EU service on the procedures and documents required in international trade which is available for everyone (Link). 

 

7. Forwarder and Customs Broker 

A freight forwarder or agent is the intermediary who arranges and/or provides additional services for the transport of goods on behalf of the issuer or receiver.

The Customs agent, however, is the natural or legal person authorised to process the necessary documentation to be presented to Customs for the export and import of goods, make payments of duties, taxes, licensing, certifications and meet the customs authorities on behalf of the client, exporter or importer.

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8. Packing

When preparing the packaging it is important to consider the type of selected transport and the requirements that may be requested on arrival, which may change from one country to another or even, over time, within the same destination . It is common to be asked, for example, to fulfil fumigation requirements when using wood pallets or some product labels to contain certain information or to be printed in a particular language.

If you are unsure of the packaging requirements that are requested in your client’s country, we suggest you talk to him so that he informs you about those requirements or contact a forwarder. It is not advisable to discard these requirements, as some unwary  exporters  do, because of  three main reasons.

  • You will lose your customer because you will be unable to meet export requirements
  • Your company will lose competitiveness and it will endanger the company’s name.
  • The costs may be higher if the goods subsequently are required to be packed for transport.


Nippon Express, as a company with experience in the sector, can advise you on these issues when preparing your cargo and facilitate and instruct you in the best conditions for the packaging and avoid all these problems.

 

9. Loading / Unloading of Goods

The process of loading, lashing and deconsolidating is a vital point to avoid damage to the goods. Although it may seem ridiculous to mention, make sure the goods are well settled and lashed inside the container during the loading process, in order to prevent damages caused by the movement of the container during the cargo transportation.


Think that while the goods are in a container, transport movement continues to affect the goods and any sudden movement can make the merchandise move and damage it. Therefore, when you load the goods in your premises or in a  co-loader facilities, make sure that they are well lashed. It will save you from headaches and your customer will be more satisfied with your services.

 

10. Customs Process 

Customs formalities can be a mere formality or a nightmare. Submit the documentation required in time and correctly filled in, can streamline these procedures. Periodically, in some cases, a Custom inspection on traded goods, either documentary or physical, is requested.

On this point, we suggest that you try to get the number of approved exporter company and work with OAS companies, as this will allow you to expedite these procedures and the inspections will usually be reduced.

At this point we must also mention the issue of duties and VAT tax payment. If you are performing an export, you don’t have to deal with VAT. In case of imports, in addition to tariffs, you will face the VAT payment. In this regard, the new European Union legislation has created the option of deferred payment provided you comply with the requirements that the tax office requests for it. You  can check out these requirements in the following link

In the case of customs tariffs, if you are the person receiving the goods, you shall assume the payment of tariffs. Their payment is compulsory at customs clearance. If you do not know the type of tariff applicable to your goods, you can check it in  link